Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2022 | |
Entity File Number | 001-32470 | |
Entity Registrant Name | Franklin Street Properties Corp. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 04-3578653 | |
Entity Address, Address Line One | 401 Edgewater Place, Suite 200 | |
Entity Address, City or Town | Wakefield | |
Entity Address, State or Province | MA | |
Entity Address, Postal Zip Code | 01880 | |
City Area Code | 781 | |
Local Phone Number | 557-1300 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | FSP | |
Security Exchange Name | NYSEAMER | |
Entity Common Stock, Shares Outstanding | 103,151,781 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001031316 | |
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Real estate assets: | ||
Land | $ 146,844 | $ 146,844 |
Buildings and improvements | 1,465,312 | 1,457,209 |
Fixtures and equipment | 11,819 | 11,404 |
Total real estate assets, gross | 1,623,975 | 1,615,457 |
Less accumulated depreciation | 436,627 | 424,487 |
Real estate assets, net | 1,187,348 | 1,190,970 |
Acquired real estate leases, less accumulated amortization of $23,346 and $40,423, respectively | 13,453 | 14,934 |
Cash, cash equivalents and restricted cash | 10,983 | 40,751 |
Tenant rent receivables | 2,041 | 1,954 |
Straight-line rent receivable | 51,309 | 49,024 |
Prepaid expenses and other assets | 7,403 | 4,031 |
Related party mortgage loan receivable | 24,000 | 24,000 |
Office computers and furniture, net of accumulated depreciation of $1,065 and $1,198, respectively | 204 | 198 |
Deferred leasing commissions, net of accumulated amortization of $21,207 and $21,099, respectively | 40,379 | 38,311 |
Total assets | 1,337,120 | 1,364,173 |
Liabilities: | ||
Bank note payable | 40,000 | |
Term loans payable, less unamortized financing costs of $598 and $714, respectively | 274,402 | 274,286 |
Series A & Series B Senior Notes, less unamortized financing costs of $617 and $658, respectively | 199,383 | 199,342 |
Accounts payable and accrued expenses | 44,700 | 89,493 |
Accrued compensation | 1,206 | 4,704 |
Tenant security deposits | 5,837 | 6,219 |
Lease liability | 1,061 | 1,159 |
Other liabilities: derivative liabilities | 195 | 5,239 |
Acquired unfavorable real estate leases, less accumulated amortization of $1,469 and $2,285, respectively | 450 | 528 |
Total liabilities | 567,234 | 580,970 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $.0001 par value, 20,000,000 shares authorized, none issued or outstanding | ||
Common stock, $.0001 par value, 180,000,000 shares authorized, 103,151,781 and 103,998,520 shares issued and outstanding, respectively | 10 | 10 |
Additional paid-in capital | 1,334,383 | 1,339,226 |
Accumulated other comprehensive loss | (195) | (5,239) |
Distributions in excess of accumulated earnings | (564,312) | (550,794) |
Total stockholders' equity | 769,886 | 783,203 |
Total liabilities and stockholders' equity | $ 1,337,120 | $ 1,364,173 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Acquired real estate leases, accumulated amortization | $ 23,346 | $ 40,423 |
Office computers and furniture, accumulated depreciation | 1,065 | 1,198 |
Deferred leasing commissions, accumulated amortization | 21,207 | 21,099 |
Term loan payable, unamortized financing costs | 598 | 714 |
Series A & Series B Senior notes, unamortized financing costs | 617 | 658 |
Acquired unfavorable real estate leases, accumulated amortization | $ 1,469 | $ 2,285 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 180,000,000 | 180,000,000 |
Common stock, shares issued (in shares) | 103,151,781 | 103,998,520 |
Common stock, shares outstanding (in shares) | 103,151,781 | 103,998,520 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Total revenues | $ 42,264 | $ 59,039 |
Expenses: | ||
Real estate operating expenses | 12,834 | 15,939 |
Real estate taxes and insurance | 8,719 | 12,366 |
Depreciation and amortization | 15,670 | 24,381 |
General and administrative | 3,784 | 4,146 |
Interest | 5,366 | 8,600 |
Total expenses | 46,373 | 65,432 |
Income (loss) before taxes and equity in income of non-consolidated REITs | (4,109) | (6,393) |
Tax expense | 49 | 67 |
Net loss | $ (4,158) | $ (6,460) |
Weighted average number of shares outstanding, basic | 103,691 | 107,328 |
Weighted average number of shares outstanding, diluted | 103,691 | 107,328 |
Net income per share, basic | $ (0.04) | $ (0.06) |
Net income per share, diluted | $ (0.04) | $ (0.06) |
Rental | ||
Revenues: | ||
Rental | $ 41,797 | $ 58,623 |
Related party revenue: Management fees and interest income from loans | ||
Revenues: | ||
Revenue | 460 | 410 |
Related party revenue: Other | ||
Revenues: | ||
Revenue | $ 7 | $ 6 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Consolidated Statements of Comprehensive Income (Loss) | ||
Net loss | $ (4,158) | $ (6,460) |
Other comprehensive income (loss): | ||
Unrealized gain (loss) on derivative financial instruments | 5,044 | 3,613 |
Total other comprehensive income (loss) | 5,044 | 3,613 |
Comprehensive income (loss) | $ 886 | $ (2,847) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive income (loss) | Distributions in excess of accumulated earnings | Total |
Balance at Dec. 31, 2020 | $ 11 | $ 1,357,131 | $ (17,311) | $ (571,740) | $ 768,091 |
Balance (in shares) at Dec. 31, 2020 | 107,328,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Comprehensive income (loss) | 3,613 | (6,460) | (2,847) | ||
Distributions | (9,660) | (9,660) | |||
Balance at Mar. 31, 2021 | $ 11 | 1,357,131 | (13,698) | (587,860) | 755,584 |
Balance (in shares) at Mar. 31, 2021 | 107,328,000 | ||||
Balance at Dec. 31, 2020 | $ 11 | 1,357,131 | (17,311) | (571,740) | 768,091 |
Balance (in shares) at Dec. 31, 2020 | 107,328,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Repurchased shares | $ (18,244) | ||||
Repurchased shares (in shares) | (3,396,243) | ||||
Balance at Dec. 31, 2021 | $ 10 | 1,339,226 | (5,239) | (550,794) | $ 783,203 |
Balance (in shares) at Dec. 31, 2021 | 103,999,000 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Comprehensive income (loss) | 5,044 | (4,158) | 886 | ||
Repurchased shares | (4,843) | $ (4,843) | |||
Repurchased shares (in shares) | (847,000) | (846,739) | |||
Distributions | (9,360) | $ (9,360) | |||
Balance at Mar. 31, 2022 | $ 10 | $ 1,334,383 | $ (195) | $ (564,312) | $ 769,886 |
Balance (in shares) at Mar. 31, 2022 | 103,152,000 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Consolidated Statements of Stockholders' Equity | ||
Distributions common stock (in dollars per share) | $ 0.09 | $ 0.09 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ (4,158) | $ (6,460) |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 16,195 | 25,088 |
Amortization of above and below market leases | (9) | (32) |
Changes in operating assets and liabilities: | ||
Tenant rent receivables | (87) | 3,319 |
Straight-line rents | (1,216) | (1,904) |
Lease acquisition costs | (1,069) | (50) |
Prepaid expenses and other assets | (1,274) | (532) |
Accounts payable and accrued expenses | (10,568) | (9,564) |
Accrued compensation | (3,498) | (2,528) |
Tenant security deposits | (382) | (636) |
Payment of deferred leasing commissions | (3,706) | (5,056) |
Net cash provided by operating activities | (9,772) | 1,645 |
Cash flows from investing activities: | ||
Property improvements, fixtures and equipment | (9,952) | (16,022) |
Net cash provided by (used in) investing activities | (9,952) | (16,022) |
Cash flows from financing activities: | ||
Distributions to stockholders | (42,640) | (9,660) |
Stock repurchases | (4,843) | |
Borrowings under bank note payable | 45,000 | 36,500 |
Repayments of bank note payable | (5,000) | (12,500) |
Deferred financing costs | (2,561) | |
Net cash used in financing activities | (10,044) | 14,340 |
Net increase (decrease) in cash, cash equivalents and restricted cash | (29,768) | (37) |
Cash, cash equivalents and restricted cash, beginning of year | 40,751 | 4,150 |
Cash, cash equivalents and restricted cash, end of period | 10,983 | 4,113 |
Cash paid for: | ||
Interest | 2,737 | 5,870 |
Taxes | 664 | 24 |
Non-cash investing and financing activities: | ||
Accrued costs for purchases of real estate assets | $ 3,766 | $ 9,585 |
Organization, Properties, Basis
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards | 3 Months Ended |
Mar. 31, 2022 | |
Organization | |
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards | 1. Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards Organization Franklin Street Properties Corp. (“FSP Corp.” or the “Company”) holds, directly and indirectly, 100% of the interest in FSP Investments LLC, FSP Property Management LLC FSP Holdings LLC FSP Protective TRS Corp . FSP Property Management LLC provides asset management and property management services. The Company also has a non-controlling common stock interest in two corporations organized to operate as real estate investment trusts (“REIT”). Collectively, the two REITs are referred to as the “Sponsored REITs”. As of March 31, 2022, the Company owned and operated a portfolio of real estate consisting of 24 operating properties, two managed Sponsored REITs and held one promissory note secured by a mortgage on real estate owned by a Sponsored REIT. From time-to-time, the Company may acquire real estate or make additional secured loans. The Company may also pursue, on a selective basis, the sale of its properties in order to take advantage of the value creation and demand for its properties, or for geographic or property specific reasons. Properties The following table summarizes the Company’s number of operating properties, which we also refer to as our owned properties and rentable square feet of real estate. As of March 31, 2022 2021 Operating Properties: Number of properties 24 33 Rentable square feet 6,915,609 9,548,810 Basis of Presentation The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission. The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other period. Financial Instruments As disclosed in Note 4, the Company’s derivatives are recorded at fair value using Level 2 inputs. The Company estimates that the carrying values of cash and cash equivalents, restricted cash, receivables, prepaid expenses, accounts payable and accrued expenses, accrued compensation, and tenant security deposits approximate their fair values based on their short-term maturity and the bank note and term loans payable approximate their fair values as they bear interest at variable interest rates or at rates that are at market for similar investments. Cash, Cash Equ ivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows. March 31, March 31, (in thousands) 2022 2021 Cash and cash equivalents $ 7,683 $ 2,613 Restricted cash 3,300 1,500 Total cash, cash equivalents and restricted cash $ 10,983 $ 4,113 Restricted cash consists of escrows arising from property sales. Cash held in escrow is paid based on the terms of the closing agreements for the sale. Variable Interest Entities (VIEs) We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary. We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment. We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct a proposed sale of the property or merger of the company. In addition, we consider the rights of other investors to participate in those decisions, to replace the manager and to amend the corporate charter. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion upon a reconsideration event. As of March 31, 2022, our relationship with FSP Monument Circle LLC was considered a VIE for which we are not the primary beneficiary. Our maximum exposure to losses associated with this VIE is limited to the outstanding Sponsored REIT Loan, the related accrued interest receivable and an exit fee receivable, which were in aggregate approximately $24.9 million and $24.5 million at March 31, 2022 and December 31, 2021, respectively. The accrued interest and exit fee receivables are included in prepaid expenses and other assets in the consolidated balance sheet and are approximately $0.9 million and $0.5 million at March 31, 2022 and December 31, 2021, respectively. The relationships and investments related to the entity in which we have a variable interest are summarized in Note 2. Recent Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company is currently assessing the potential impact that the adoption of ASU 2020-04 may have on its consolidated financial statements. |
Related Party Transactions and
Related Party Transactions and Investments in Non-Consolidated Entities | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions and Investments in Non-Consolidated Entities | |
Related Party Transactions and Investments in Non-Consolidated Entities | 2. Related Party Transactions and Investments in Non-Consolidated Entities Investment in Sponsored REITs: At each of March 31, 2022 and December 31, 2021, the Company held a non-controlling common stock interest in two Sponsored REITs in which the Company no longer shares in economic benefit or risk. Management fees and interest income from loans: Asset management fees range from 1% to 5% of collected rents and the applicable contracts are cancellable with 30 days notice. Asset management fee income from non-consolidated entities amounted to approximately $9,000 and $16,000 for the three months ended March 31, 2022 and 2021, respectively. From time to time the Company may make secured loans (“Sponsored REIT Loans”) to Sponsored REITs in the form of mortgage loans or revolving lines of credit to fund construction costs, capital expenditures, leasing costs and for other purposes. The Company reviews the need for an allowance under the current expected credit loss model (“CECL”) for Sponsored REIT Loans each reporting period. The measurement of expected credit losses is based upon historical experiences, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. The Company has elected to apply the practical expedient for financial assets secured by collateral in instances where the borrower is experiencing financial difficulty and repayment of the Sponsored REIT Loan is expected to be provided substantially through operation or sale of the collateral. The Company uses the fair value of the collateral at the reporting date and an adjustment to the allowance for expected credit losses is recorded when the amortized cost basis of the financial asset exceeds the fair value of the collateral, less costs to sell. The Company regularly evaluates the extent and impact of any credit deterioration that could affect performance and the value of the secured property, as well as the financial and operating capability of the borrower. A property’s fair value, operating results and existing cash balances are considered and used to assess whether cash flows from operations are sufficient to cover the current and future operating and debt service requirements. The Company also evaluates the borrower’s competency in managing and operating the secured property and considers the overall economic environment, real estate sector and geographic sub-market in which the secured property is located. The Company applies normal loan review and underwriting procedures (as may be implemented or modified from time to time) in making that judgment. None of the Sponsored REIT loans have been impaired. The Company anticipates the sole Sponsored REIT Loan outstanding will be repaid at maturity or earlier from refinancing, long term financings of the underlying property, cash flows from the underlying property or some other capital event. The outstanding Sponsored REIT Loan is secured by a mortgage on the underlying property and has a term of approximately two years . The following is a summary of the sole Sponsored REIT Loan outstanding as of March 31, 2022: Maximum Amount Interest (dollars in thousands, except footnotes) Maturity Amount Outstanding Rate at Sponsored REIT Location Date of Loan 31-Mar-22 31-Mar-22 Mortgage loan secured by property FSP Monument Circle LLC (1) Indianapolis, IN 30-Jun-23 $ 24,000 $ 24,000 7.51 % $ 24,000 $ 24,000 (1) The interest rate is a fixed rate and this mortgage loan includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower. The Company recognized interest income and fees from the Sponsored REIT Loan of approximately $451,000 and $394,000 for the three months ended March 31, 2022 and 2021, respectively. The financial instrument was classified within Level 3 of the fair value hierarchy and had a fair value of approximately $24.3 million as of March 31, 2022. On October 29, 2021, the Company agreed to amend and restate its existing Sponsored REIT Loan to FSP Monument Circle LLC to extend the maturity date from December 6, 2022 to June 30, 2023 and to advance an additional $3.0 million tranche of indebtedness to FSP Monument Circle LLC with the same June 30, 2023 maturity date, effectively increasing the aggregate principal amount of the Sponsored REIT Loan from $21 million to $24 million. In addition, the Company agreed to defer all principal and interest payments due under the Sponsored REIT Loan until the maturity date on June 30, 2023. As part of its consideration for agreeing to amend and restate the Sponsored REIT Loan, the Company obtained from the stockholders of the parent of FSP Monument Circle LLC the right to vote their shares in favor of any sale of the property owned by FSP Monument Circle LLC any time on or after January 1, 2023. There were no commitments to lend additional funds to the Sponsored REIT and the loan is fully collateralized by the mortgage held on the Sponsored REIT’s property and by cash accounts, as of March 31, 2022. |
Bank Note Payable, Term Note Pa
Bank Note Payable, Term Note Payable and Private Placements | 3 Months Ended |
Mar. 31, 2022 | |
Bank Note Payable, Term Note Payable and Private Placements | |
Bank Note Payable, Term Note Payable and Senior Notes | 3. Bank Note Payable, Term Loans Payable and Senior Notes JPM Term Loan On August 2, 2018, the Company entered into an Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent and lender (“JPMorgan”), and the other lending institutions party thereto (the “JPM Credit Agreement”), which provided a single unsecured bridge loan in the aggregate principal amount of $150 million (the “JPM Term Loan”). On December 24, 2020, the Company repaid a $50 million portion of the JPM Term Loan with a portion of the proceeds from the December 23, 2020 sale of its Durham, North Carolina property, and $100 million remained fully advanced and outstanding under the JPM Term Loan. On June 4, 2021, the Company repaid the remaining $100 million outstanding on the loan, which had been scheduled to mature on November 30, 2021, and incurred a loss on extinguishment of debt of $0.1 million related to unamortized deferred financing costs. Although the interest rate on the JPM Term Loan was variable under the JPM Credit Agreement, the Company fixed the LIBOR-based rate on a portion of the JPM Term Loan by entering into interest rate swap transactions. On March 7, 2019, the Company entered into ISDA Master Agreements with various financial institutions to hedge a $100 million portion of the future LIBOR-based rate risk under the JPM Credit Agreement. Effective March 29, 2019, the Company fixed the LIBOR-based rate at 2.44% per annum on a $100 million portion of the JPM Term Loan until November 30, 2021. On June 4, 2021, the Company paid approximately $1.2 million to terminate the interest rate swap, which was scheduled to mature on November 30, 2021. BMO Term Loan On September 27, 2018, the Company entered into a Second Amended and Restated Credit Agreement with the lending institutions party thereto and Bank of Montreal (“BMO”), as administrative agent (the “BMO Credit Agreement”). The BMO Credit Agreement provides for a single, unsecured term loan borrowing in the initial amount of $220 million (the “BMO Term Loan”), of which $165 million remains fully advanced and outstanding. The BMO Term Loan initially consisted of a $55 million tranche A term loan and a $165 million tranche B term loan. On June 4, 2021, the Company repaid the tranche A term loan that was scheduled to mature on November 30, 2021, and incurred a loss on extinguishment of debt of $0.1 million related to unamortized deferred financing costs. The $165 million tranche B term loan matures on January 31, 2024. The BMO Credit Agreement also includes an accordion feature that allows up to $100 million of additional loans, subject to receipt of lender commitments and satisfaction of certain customary conditions. The BMO Term Loan was previously evidenced by an Amended and Restated Credit Agreement, dated October 29, 2014, among the Company, BMO, as administrative agent and lender, and the other lending institutions party thereto, as amended by a First Amendment, dated July 21, 2016, and a Second Amendment, dated October 18, 2017. The BMO Term Loan bears interest at either (i) a number of basis points over LIBOR depending on the Company’s credit rating (165 basis points over LIBOR at March 31, 2022) or (ii) a number of basis points over the base rate depending on the Company’s credit rating (65 basis points over the base rate at March 31, 2022). Although the interest rate on the BMO Term Loan is variable under the BMO Credit Agreement, the Company fixed the base LIBOR interest rate by entering into interest rate swap transactions. On August 26, 2013, the Company entered into an ISDA Master Agreement with BMO that fixed the base LIBOR interest rate on the BMO Term Loan at 2.32 % per annum, which matured on August 26, 2020. On February 20, 2019, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BMO Term Loan at 2.39 % per annum for the period beginning on August 26, 2020 and ending January 31, 2024. Accordingly, based upon the Company’s credit rating, as of March 31, 2022, the effective interest rate on the BMO Term Loan was 4.04 % per annum. On June 4, 2021, the Company paid approximately $0.6 million to terminate the portion of the interest rate swap on the tranche A term loan, which was scheduled to mature on November 30, 2021. The BMO Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The BMO Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The BMO Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BMO Credit Agreement). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BMO Credit Agreement immediately due and payable, terminate the lenders’ commitments to make loans under the BMO Credit Agreement, and enforce any and all rights of the lenders or the administrative agent under the BMO Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the BMO Term Loan financial covenants as of March 31, 2022. BofA Revolver On January 10, 2022, the Company entered into a Credit Agreement (the “BofA Credit Agreement”) with Bank of America, N.A., as administrative agent, a letter of credit issuer and a lender (“BofA”), and the other lending institutions party thereto, for a new revolving line of credit for borrowings, at the Company’s election, of up to $217.5 million (the “BofA Revolver”). On February 10, 2022, the Company increased its BofA Revolver availability by $20.0 million to $237.5 million as part of the accordion feature that is available to increase borrowing capacity. Borrowings made under the BofA Revolver may be revolving loans or letters of credit, the combined sum of which may not exceed million drawn and outstanding under the BofA Revolver. Borrowings made pursuant to the BofA Revolver may be borrowed, repaid and reborrowed from time to time until the maturity date on January 12, 2024. The Company has the right to request an extension of the maturity date, subject to acceptance by the lenders and satisfaction of certain other customary conditions. The BofA Revolver includes an accordion feature that allows the Company to request an increase in borrowing capacity to an amount not exceeding million in the aggregate, subject to receipt of lender commitments and satisfaction of certain customary conditions. Borrowings under the BofA Revolver bear interest at a margin over either (i) the daily simple Secured Overnight Financing Rate (“SOFR”), plus an adjustment of 0.11448%, or (ii) one three Based upon the Company’s credit rating, as of March 31, 2022, the interest rate on the BofA Revolver was 2.06 % per annum. The weighted average variable interest rate on all amounts outstanding under the BofA Revolver through March 31, 2022 was approximately 2.04 % per annum. The BofA Credit Agreement contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The BofA Credit Agreement also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio and a minimum unsecured interest coverage ratio. The BofA Credit Agreement also restricts the Company’s ability to make dividend distributions that exceed of the Company’s good faith estimate of projected funds from operations for the applicable fiscal year; provided, however, that notwithstanding such restriction, the Company is permitted to make dividend distributions based on the Company’s good faith estimate of projected or estimated taxable income or otherwise as necessary to retain the Company’s status as a real estate investment trust, to meet the distribution requirements of Section 857 of the Internal Revenue Code or to eliminate any income or excise taxes to which the Company would otherwise be subject. The Company was in compliance with the BofA Revolver financial covenants as of March 31, 2022. The BofA Credit Agreement provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, failure to comply with the provisions of the BofA Credit Agreement, certain cross defaults and a change in control of the Company (as defined in the BofA Credit Agreement). In the event of a default by the Company, BofA, in its capacity as administrative agent, may, and at the request of the requisite number of lenders shall, declare all obligations under the BofA Credit Agreement immediately due and payable and enforce any and all rights of the lenders or BofA under the BofA Credit Agreement and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, all outstanding obligations of the Company will become immediately due and payable. The Company may use the net proceeds of the BofA Revolver to finance the acquisition of real properties and for other permitted investments; to finance investments associated with Sponsored REITs, to refinance or retire indebtedness and for working capital and other general business purposes, in each case to the extent permitted under the BofA Credit Agreement. BofA Credit Facility On July 21, 2016, the Company entered into a First Amendment (the “BofA First Amendment”), and on October 18, 2017, the Company entered into a Second Amendment (the “BofA Second Amendment”), to the Second Amended and Restated Credit Agreement dated October 29, 2014 among the Company, the lending institutions party thereto and BofA, as administrative agent, L/C Issuer and Swing Line Lender (as amended by the BofA First Amendment and the BofA Second Amendment, the “BofA Credit Facility”) that continued an existing unsecured revolving line of credit (the “Former BofA Revolver”) and an existing term loan (the “BofA Term Loan”). Effective simultaneously with the closing of the BofA Revolver on January 10, 2022, the Company delivered a notice to BofA terminating the aggregate lender commitments under the Former BofA Revolver in their entirety. There were no amounts drawn on the Former BofA Revolver as of December 31, 2021 and January 10, 2022. BofA Term Loan Highlights ● The original principal amount of the BofA Term Loan was $400 million. On September 30, 2021, the Company repaid a $90 million portion and on October 25, 2021, the Company repaid a $200 million portion of the BofA Term Loan and incurred a loss on extinguishment of debt of $0.7 million related to unamortized deferred financing costs. As of March 31, 2022, $110 million remained outstanding under the BofA Term Loan. ● The BofA Term Loan matures on January 12, 2023. ● The BofA Credit Facility includes an accordion feature that allows for an aggregate amount of up to $500 million of additional borrowing capacity applicable to the BofA Term Loan, subject to receipt of lender commitments and satisfaction of certain customary conditions. The BofA Term Loan bears interest at either (i) a margin over LIBOR depending on the Company’s credit rating (1.75% over LIBOR at March 31, 2022) or (ii) a margin over the base rate depending on the Company’s credit rating (0.75% over the base rate at March 31, 2022). The interest rate on the BofA Term Loan was variable at March 31, 2022. Previously the Company had fixed the base LIBOR interest rate on the BofA Term Loan by entering into interest rate swap transactions. On July 22, 2016, the Company entered into ISDA Master Agreements with a group of banks that fixed the base LIBOR interest rate on the BofA Term Loan at per annum for the period beginning on September 27, 2017 and ended on September 27, 2021. Based upon the Company’s credit rating, as of March 31, 2022, the interest rate on the BofA Term Loan was 2.20 % per annum. The weighted average variable interest rate on all amounts outstanding under the BofA Term Loan through March 31, 2022, was approximately 1.90 % per annum. BofA Credit Facility General Information The BofA Credit Facility contains customary affirmative and negative covenants for credit facilities of this type, including limitations with respect to indebtedness, liens, investments, mergers and acquisitions, disposition of assets, changes in business, certain restricted payments, the requirement to have subsidiaries provide a guaranty in the event that they incur recourse indebtedness and transactions with affiliates. The BofA Credit Facility also contains financial covenants that require the Company to maintain a minimum tangible net worth, a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, and minimum unsecured interest coverage. The BofA Credit Facility provides for customary events of default with corresponding grace periods, including failure to pay any principal or interest when due, certain cross defaults and a change in control of the Company (as defined in the BofA Credit Facility). In the event of a default by the Company, the administrative agent may, and at the request of the requisite number of lenders shall, declare all obligations under the BofA Credit Facility immediately due and payable, terminate the lenders’ commitments to make loans under the BofA Credit Facility, and enforce any and all rights of the lenders or administrative agent under the BofA Credit Facility and related documents. For certain events of default related to bankruptcy, insolvency, and receivership, the commitments of lenders will be automatically terminated and all outstanding obligations of the Company will become immediately due and payable. The Company was in compliance with the BofA Credit Facility financial covenants as of March 31, 2022. The Company may use the proceeds of the loans under the BofA Credit Facility to finance the acquisition of real properties and for other permitted investments; to finance investments associated with Sponsored REITs, to refinance or retire indebtedness and for working capital and other general business purposes, in each case to the extent permitted under the BofA Credit Facility. Senior Notes On October 24, 2017, the Company entered into a note purchase agreement (the “Note Purchase Agreement”) with the various purchasers named therein (the “Purchasers”) in connection with a private placement of senior unsecured notes. Under the Note Purchase Agreement, the Company agreed to sell to the Purchasers an aggregate principal amount of $200 million of senior unsecured notes consisting of (i) Series A Senior Notes due December 20, 2024 in an aggregate principal amount of $116 million (the “Series A Notes”) and (ii) Series B Senior Notes due December 20, 2027 in an aggregate principal amount of $84 million (the “Series B Notes” and, together with the Series A Notes, the “Senior Notes”). On December 20, 2017, the Senior Notes were funded and the proceeds were used to reduce the outstanding balance of the Former BofA Revolver. The Senior Notes bear interest depending on the Company’s credit rating. As of March 31, 2022, the Series A Notes bear interest at 4.49% per annum and the Series B Notes bear interest at 4.76 % per annum. The Note Purchase Agreement contains customary financial covenants, including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, and a maximum unencumbered leverage ratio. The Note Purchase Agreement also contains restrictive covenants that, among other things, restrict the ability of the Company and its subsidiaries to enter into transactions with affiliates, merge, consolidate, create liens, make certain restricted payments, enter into certain agreements or prepay certain indebtedness. Such financial and restrictive covenants are substantially similar to the corresponding covenants contained in the BofA Credit Facility, the BMO Credit Agreement and the JPM Credit Agreement. The Senior Notes financial covenants require, among other things, the maintenance of a fixed charge coverage ratio of at least 1.50; a maximum leverage ratio and an unsecured leverage ratio of no more than 60% (65 % if there were a significant acquisition for a short period of time). In addition, the Note Purchase Agreement provides that the Note Purchase Agreement will automatically incorporate additional financial and other specified covenants (such as limitations on investments and distributions) that are effective from time to time under the existing credit agreements, other material indebtedness or certain other private placements of debt of the Company and its subsidiaries. The Note Purchase Agreement contains customary events of default, including payment defaults, cross defaults with certain other indebtedness, breaches of covenants and bankruptcy events. In the case of an event of default, the Purchasers may, among other remedies, accelerate the payment of all obligations. The Company was in compliance with the Senior Notes financial covenants as of March 31, 2022. |
Financial Instruments_ Derivati
Financial Instruments: Derivatives and Hedging | 3 Months Ended |
Mar. 31, 2022 | |
Financial Instruments: Derivatives and Hedging | |
Financial Instruments: Derivatives and Hedging | 4. Financial Instruments: Derivatives and Hedging On July 22, 2016, the Company entered into interest rate swap transactions that fixed the interest rate for the period beginning on September 27, 2017 and ended on September 27, 2021 on the BofA Term Loan (the “2017 Interest Rate Swap”). On March 7, 2019, the Company entered into interest rate swap transactions that fixed the interest rate for the period beginning on March 29, 2019 and ended on November 30, 2021 on a $100 million portion of the JPM Term Loan (the “2019 JPM Interest Rate Swap”). On February 20, 2019, the Company entered into interest rate swap transactions that fixed the interest rate for the period beginning August 26, 2020 and ending January 31, 2024 on the BMO Term Loan (the “2019 BMO Interest Rate Swap”). The variable rates that were fixed under the 2017 Interest Rate Swap, the 2019 JPM Interest Rate Swap and the 2019 BMO Interest Rate Swap (collectively referred to as the “Interest Rate Swaps”) are described in Note 3. On June 4, 2021, the Company paid approximately $1.2 million to terminate the 2019 JPM Interest Rate Swap that was scheduled to mature on November 30, 2021 and approximately $0.6 million to terminate a portion of the 2019 BMO Interest Rate Swap that was scheduled to mature on November 30, 2021. As a result of the terminations, approximately $1.9 million of the balance held in accumulated other comprehensive income (loss) was reclassified into earnings. The JPM Term Loan and a portion of the BMO Term Loan related to these interest rate swaps was also repaid on June 4, 2021, which is described in Note 3. The Interest Rate Swaps qualify as cash flow hedges and have been recognized on the consolidated balance sheets at fair value. If a derivative qualifies as a hedge, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value will be recognized in earnings in the same period in which the hedged interest payments affect earnings, which may increase or decrease reported net income and stockholders’ equity prospectively, depending on future levels of interest rates and other variables affecting the fair values of derivative instruments and hedged items, but will have no effect on cash flows. The following table summarizes the notional and fair value of the Company’s derivative financial instruments at March 31, 2022 and December 31, 2021. The notional value is an indication of the extent of the Company’s involvement in these instruments at that time, but does not represent exposure to credit, interest rate or market risks. Notional Strike Effective Expiration Fair Value (2) at (in thousands) Value Rate Date Date March 31, 2022 December 31, 2021 2019 BMO Interest Rate Swap (1) $ 165,000 2.39 % Aug-20 Jan-24 $ (195) $ (5,239) (1) The Notional Value decreased to $165 million on June 4, 2021. (2) Classified within Level 2 of the fair value hierarchy. The 2019 BMO Interest Rate Swap was reported as a liability with a fair value of approximately $0.2 million and $5.2 million at March 31, 2022 and December 31, 2021, respectively. The balance is included in other liabilities: derivative liabilities in the consolidated balance sheet at March 31, 2022 and December 31, 2021, respectively. The gain/(loss) on the Company’s Interest Rate Swaps that was recorded in other comprehensive income (loss) (OCI) and the accompanying consolidated statements of operations as a component of interest expense for the three months ended March 31, 2022 and 2021, respectively, was as follows: (in thousands) Three Months Ended March 31, Interest Rate Swaps in Cash Flow Hedging Relationships: 2022 2021 Amounts of gain (loss) recognized in OCI $ 4,123 $ 807 Amounts of previously recorded gain/(loss) reclassified from OCI into Interest Expense $ (921) $ (2,806) Total amount of Interest Expense presented in the consolidated statements of operations $ 5,366 $ 8,600 Over time, the unrealized gains and losses held in accumulated other comprehensive income will be reclassified into earnings as an increase or reduction to interest expense in the same periods in which the hedged interest payments affect earnings. The Company estimates that approximately $0.1 million of the current balance held in accumulated other comprehensive income (loss) will be reclassified into earnings within the next 12 months. The Company is hedging the exposure to variability in anticipated future interest payments on existing debt. The BMO Term Loan hedging transaction uses derivative instruments that involve certain additional risks such as counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract. The Company requires its derivatives contracts to be with counterparties that have investment grade ratings. As a result, the Company does not anticipate that any counterparty will fail to meet its obligations. However, there can be no assurance that the Company will be able to adequately protect against the foregoing risks or that it will ultimately realize an economic benefit that exceeds the related amounts incurred in connection with engaging in such hedging strategies. The fair value of the Company’s derivative instruments are determined using the net discounted cash flows of the expected cash flows of the derivative based on the market based interest rate curve and are adjusted to reflect credit or nonperformance risk. The risk is estimated by the Company using credit spreads and risk premiums that are observable in the market. These financial instruments were classified within Level 2 of the fair value hierarchy and were classified as an asset or liability on the consolidated balance sheets. The Company’s derivatives are recorded at fair value in other assets: derivative asset and other liabilities: derivative liability in the consolidated balance sheets and the effective portion of the derivatives’ fair value is recorded to other comprehensive income (loss) in the consolidated statements of comprehensive income (loss). |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Net Income Per Share | |
Net Income Per Share | 5. Net Income Per Share Basic net income per share is computed by dividing net income by the weighted average number of Company shares outstanding during the period. Diluted net income per share reflects the potential dilution that could occur if securities or other contracts to issue shares were exercised or converted into shares. There were no potential dilutive shares outstanding at each of March 31, 2022 and 2021. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity | |
Stockholders' Equity | 6. Stockholders’ Equity As of March 31, 2022, the Company had 103,151,781 shares of common stock outstanding. The Company declared and paid dividends as follows (in thousands, except per share amounts): Dividends Per Total Quarter Paid Share Dividends Special dividend declared in December 2021 and paid January 2022 $ 0.32 $ 33,280 First quarter of 2022 $ 0.09 $ 9,360 First quarter of 2021 $ 0.09 $ 9,660 Equity-Based Compensation On May 20, 2002, the stockholders of the Company approved the 2002 Stock Incentive Plan (the “Plan”). The Plan is an equity-based incentive compensation plan, and provides for the grants of up to a maximum of 2,000,000 shares of the Company’s common stock (“Awards”). All of the Company’s employees, officers, directors, consultants and advisors are eligible to be granted Awards. Awards under the Plan are made at the discretion of the Company’s Board of Directors, and have no vesting requirements. Upon granting an Award, the Company will recognize compensation cost equal to the fair value of the Company’s common stock, as determined by the Company’s Board of Directors, on the date of the grant. On June 4, 2020 and May 20, 2021, the Company granted shares under the Plan to non-employee directors at a compensation cost of approximately $337,500 at each grant date, which was recognized during the year ended December 31, 2020 and 2021, respectively, and is included in general and administrative expenses for such periods. Such shares were fully vested on the date of issuance. Shares Available Compensation for Grant Cost Balance December 31, 2020 1,847,384 $ 675,000 Shares granted 2021 (66,564) 337,500 Balance December 31, 2021 1,780,820 1,012,500 Shares granted 2022 - - Balance March 31, 2022 1,780,820 $ 1,012,500 Repurchase of Common Stock On June 23, 2021, the Board of Directors of the Company authorized the repurchase of up to $50 million of the Company’s common stock from time to time in the open market, privately negotiated transactions or other manners as permitted by federal securities laws. The repurchase authorization may be suspended or discontinued at any time. The Company subsequently repurchased 3,396,243 shares of common stock during the third and fourth quarters of 2021 at an aggregate cost of approximately $18.2 million at an average cost of approximately $5.37 per share, inclusive of brokerage commissions. The Company subsequently repurchased 846,739 shares of common stock during the first quarter of 2022 at an aggregate cost of approximately $4.8 million at an average cost of approximately $5.72 per share, inclusive of brokerage commissions. The excess of the purchase price over the par value of the shares repurchased is applied to reduce additional paid-in capital. A summary of the repurchase of common stock by the Company is shown in the following table: (Cost in thousands) Shares Repurchased Cost Balance December 31, 2020 1,017,498 $ 18,775 Repurchase of shares 3,396,243 18,244 Balance, December 31, 2021 4,413,741 37,019 Repurchase of shares 846,739 4,843 Balance, March 31, 2022 5,260,480 $ 41,862 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Federal Income Tax Reporting | |
Income Taxes | 7. Income Taxes General The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, the Company generally is entitled to a tax deduction for distributions paid to its shareholders, thereby effectively subjecting the distributed net income of the Company to taxation at the shareholder level only. The Company must comply with a variety of restrictions to maintain its status as a REIT. These restrictions include the type of income it can earn, the type of assets it can hold, the number of shareholders it can have and the concentration of their ownership, and the amount of the Company’s taxable income that must be distributed annually. One such restriction is that the Company generally cannot own more than 10 % of the voting power or value of the securities of any one issuer unless the issuer is itself a REIT or a taxable REIT subsidiary (“TRS”). In the case of TRSs, the Company’s ownership of securities in all TRSs generally cannot exceed 20% (25% of taxable years beginning on or before December 31, 2017) of the value of all of the Company’s assets and, when considered together with other non-real estate assets, cannot exceed 25 % of the value of all of the Company’s assets. FSP Investments LLC and FSP Protective TRS Corp. are the Company’s taxable REIT subsidiaries operating as taxable corporations under the Code. The TRSs have gross amounts of net operating losses (“NOLs”) available to those taxable corporations of $4.8 million and $4.6 million as of each of December 31, 2021, and 2020 respectively. The NOLs created prior to 2018 will expire between 2030 and 2047 and the NOLs generated after 2017 will not expire. A valuation allowance is provided for the full amount of the NOLs as the realization of any tax benefits from such NOLs is not assured. Income taxes are recorded based on the future tax effects of the difference between the tax and financial reporting bases of the Company’s assets and liabilities. In estimating future tax consequences, potential future events are considered except for potential changes in income tax law or in rates. The Company adopted an accounting pronouncement related to uncertainty in income taxes effective January 1, 2007, which did not result in recording a liability, nor was any accrued interest and penalties recognized with the adoption. Accrued interest and penalties will be recorded as income tax expense, if the Company records a liability in the future. The Company’s effective tax rate was not affected by the adoption. The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The statute of limitations for the Company’s income tax returns is generally three years and as such, the Company’s returns that remain subject to examination would be primarily from 2018 and thereafter. Net operating losses Section 382 of the Code restricts a corporation’s ability to use NOLs to offset future taxable income following certain “ownership changes.” Such ownership changes occurred with past mergers and accordingly a portion of the NOLs incurred by the Sponsored REITs available for use by the Company in any particular future taxable year will be limited. To the extent that the Company does not utilize the full amount of the annual NOLs limit, the unused amount may be carried forward to offset taxable income in future years. NOLs generated prior to December 31, 2018 will expire 20 years after the year in which they arise, and the last of the Company’s NOLs will expire in 2027. A valuation allowance is provided for the full amount of the NOLs as the realization of any tax benefits from such NOLs is not assured. The gross amount of NOLs available to the Company was $1.1 million and $1.1 million as of March 31, 2022 and December 31, 2021, respectively. Income Tax Expense The Company is subject to a business tax known as the Revised Texas Franchise Tax. Some of the Company’s leases allow reimbursement by tenants for these amounts because the Revised Texas Franchise Tax replaces a portion of the property tax for school districts. Because the tax base on the Revised Texas Franchise Tax is derived from an income based measure, it is considered an income tax. The Company recorded a provision for the Revised Texas Franchise Tax of $49,000 and $67,000 for the three months ended March 31, 2022 and 2021, respectively. The income tax expense reflected in the consolidated statements of operations relates primarily to a franchise tax on the Company’s Texas properties. For the Three Months Ended March 31, (Dollars in thousands) 2022 2021 Revised Texas Franchise Tax $ 49 $ 67 Other Taxes — — Tax expense $ 49 $ 67 Taxes on income are a current tax expense. No deferred income taxes were provided as there were no material temporary differences between the financial reporting basis and the tax basis of the TRSs. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Leases | 8. Leases Leases as a Lessor: The Company is a lessor of commercial real estate with operations that include the leasing of office and industrial properties. Many of the leases with customers contain options to extend leases at a fair market rate and may also include options to terminate leases. The Company considers several inputs when evaluating the amount it expects to derive from its leased assets at the end of the lease terms, such as the remaining useful life, expected market conditions, fair value of lease payments, expected fair values of underlying assets, and expected deployment of the underlying assets. The Company’s strategy to address its risk for the residual value in its commercial real estate is to re-lease the commercial space. The Company has elected to apply the practical expedient to not separate non-lease components from the related lease component of real estate leases. This combined component is primarily comprised of fixed lease payments, early termination fees, common area maintenance cost reimbursements, and parking lease payments. The Company applies ASC 842-Leases to the combined lease and non-lease components. A minority of the Company’s leases are subject to annual changes in the Consumer Price Index (“CPI”). Although increases in the CPI are not estimated as part of the Company’s measurement of straight-line rent revenue, to the extent that the actual CPI is greater or less than the CPI at lease commencement, there could be changes to realized income or loss. For the three months ended March 31, 2022 and 2021, the Company recognized the following amounts of income relating to lease payments: Income relating to lease payments: Three Months Ended (in thousands) March 31, 2022 March 31, 2021 Income from leases (1) $ 40,573 $ 56,709 $ 40,573 $ 56,709 (1) Amounts recognized from variable lease payments were $12,665 and $14,688 for the three months ended March 31, 2022 and 2021, respectively. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events | |
Subsequent Events | 9. Subsequent Events On April 1, 2022, the Board of Directors of the Company declared a cash distribution of $0.09 per share of common stock payable on May 5, 2022 to stockholders of record on April 15, 2022. |
Organization, Properties, Bas_2
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Organization | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements of the Company include all of the accounts of the Company and its majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. These financial statements should be read in conjunction with the Company’s consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2021, as filed with the Securities and Exchange Commission. The accompanying interim financial statements are unaudited; however, the financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022 or for any other period. |
Financial Instruments | Financial Instruments As disclosed in Note 4, the Company’s derivatives are recorded at fair value using Level 2 inputs. The Company estimates that the carrying values of cash and cash equivalents, restricted cash, receivables, prepaid expenses, accounts payable and accrued expenses, accrued compensation, and tenant security deposits approximate their fair values based on their short-term maturity and the bank note and term loans payable approximate their fair values as they bear interest at variable interest rates or at rates that are at market for similar investments. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equ ivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statement of cash flows. March 31, March 31, (in thousands) 2022 2021 Cash and cash equivalents $ 7,683 $ 2,613 Restricted cash 3,300 1,500 Total cash, cash equivalents and restricted cash $ 10,983 $ 4,113 Restricted cash consists of escrows arising from property sales. Cash held in escrow is paid based on the terms of the closing agreements for the sale. |
Variable Interest Entities | Variable Interest Entities (VIEs) We determine whether an entity is a VIE and, if so, whether it should be consolidated by utilizing judgments and estimates that are inherently subjective. The determination of whether an entity in which we hold a direct or indirect variable interest is a VIE is based on several factors, including whether the entity’s total equity investment at risk upon inception is sufficient to finance the entity’s activities without additional subordinated financial support. We make judgments regarding the sufficiency of the equity at risk based first on a qualitative analysis, and then a quantitative analysis, if necessary. We analyze any investments in VIEs to determine if we are the primary beneficiary. In evaluating whether we are the primary beneficiary, we evaluate our direct and indirect economic interests in the entity. Determining which reporting entity, if any, is the primary beneficiary of a VIE is primarily a qualitative approach focused on identifying which reporting entity has both (1) the power to direct the activities of a VIE that most significantly impact such entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits from such entity that could potentially be significant to such entity. Performance of that analysis requires the exercise of judgment. We consider a variety of factors in identifying the entity that holds the power to direct matters that most significantly impact the VIE’s economic performance including, but not limited to, the ability to direct a proposed sale of the property or merger of the company. In addition, we consider the rights of other investors to participate in those decisions, to replace the manager and to amend the corporate charter. We determine whether we are the primary beneficiary of a VIE at the time we become involved with a variable interest entity and reconsider that conclusion upon a reconsideration event. As of March 31, 2022, our relationship with FSP Monument Circle LLC was considered a VIE for which we are not the primary beneficiary. Our maximum exposure to losses associated with this VIE is limited to the outstanding Sponsored REIT Loan, the related accrued interest receivable and an exit fee receivable, which were in aggregate approximately $24.9 million and $24.5 million at March 31, 2022 and December 31, 2021, respectively. The accrued interest and exit fee receivables are included in prepaid expenses and other assets in the consolidated balance sheet and are approximately $0.9 million and $0.5 million at March 31, 2022 and December 31, 2021, respectively. The relationships and investments related to the entity in which we have a variable interest are summarized in Note 2. |
Recent Accounting Standards | Recent Accounting Standards In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company is currently assessing the potential impact that the adoption of ASU 2020-04 may have on its consolidated financial statements. |
Organization, Properties, Bas_3
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Organization | |
Summary of the entity's investment in real estate assets, including number of properties and rentable square feet of real estate | As of March 31, 2022 2021 Operating Properties: Number of properties 24 33 Rentable square feet 6,915,609 9,548,810 |
Reconciliation of cash, cash equivalents, and restricted cash | March 31, March 31, (in thousands) 2022 2021 Cash and cash equivalents $ 7,683 $ 2,613 Restricted cash 3,300 1,500 Total cash, cash equivalents and restricted cash $ 10,983 $ 4,113 |
Related Party Transactions an_2
Related Party Transactions and Investments in Non-Consolidated Entities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Related Party Transactions and Investments in Non-Consolidated Entities | |
Summary of the Sponsored REIT Loans outstanding | Maximum Amount Interest (dollars in thousands, except footnotes) Maturity Amount Outstanding Rate at Sponsored REIT Location Date of Loan 31-Mar-22 31-Mar-22 Mortgage loan secured by property FSP Monument Circle LLC (1) Indianapolis, IN 30-Jun-23 $ 24,000 $ 24,000 7.51 % $ 24,000 $ 24,000 (1) The interest rate is a fixed rate and this mortgage loan includes an origination fee of $164,000 and an exit fee of $38,000 when repaid by the borrower. |
Financial Instruments_ Deriva_2
Financial Instruments: Derivatives and Hedging (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Financial Instruments: Derivatives and Hedging | |
Schedule of notional and fair value of derivative financial instruments | Notional Strike Effective Expiration Fair Value (2) at (in thousands) Value Rate Date Date March 31, 2022 December 31, 2021 2019 BMO Interest Rate Swap (1) $ 165,000 2.39 % Aug-20 Jan-24 $ (195) $ (5,239) (1) The Notional Value decreased to $165 million on June 4, 2021. (2) Classified within Level 2 of the fair value hierarchy. |
Summary of Interest Rate Swaps that was recorded in OCI | (in thousands) Three Months Ended March 31, Interest Rate Swaps in Cash Flow Hedging Relationships: 2022 2021 Amounts of gain (loss) recognized in OCI $ 4,123 $ 807 Amounts of previously recorded gain/(loss) reclassified from OCI into Interest Expense $ (921) $ (2,806) Total amount of Interest Expense presented in the consolidated statements of operations $ 5,366 $ 8,600 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Stockholders' Equity | |
Schedule of dividends declared and paid | Dividends Per Total Quarter Paid Share Dividends Special dividend declared in December 2021 and paid January 2022 $ 0.32 $ 33,280 First quarter of 2022 $ 0.09 $ 9,360 First quarter of 2021 $ 0.09 $ 9,660 |
Schedule of Share-based Payment Arrangement, Nonemployee Director Award Plan, Activity | Shares Available Compensation for Grant Cost Balance December 31, 2020 1,847,384 $ 675,000 Shares granted 2021 (66,564) 337,500 Balance December 31, 2021 1,780,820 1,012,500 Shares granted 2022 - - Balance March 31, 2022 1,780,820 $ 1,012,500 |
Schedule of repurchase of common stock | (Cost in thousands) Shares Repurchased Cost Balance December 31, 2020 1,017,498 $ 18,775 Repurchase of shares 3,396,243 18,244 Balance, December 31, 2021 4,413,741 37,019 Repurchase of shares 846,739 4,843 Balance, March 31, 2022 5,260,480 $ 41,862 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Federal Income Tax Reporting | |
Schedule of income tax expense reflected in the condensed consolidated statements of income | For the Three Months Ended March 31, (Dollars in thousands) 2022 2021 Revised Texas Franchise Tax $ 49 $ 67 Other Taxes — — Tax expense $ 49 $ 67 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases | |
Summary of income relating to lease payments and undiscounted cash flows | Income relating to lease payments: Three Months Ended (in thousands) March 31, 2022 March 31, 2021 Income from leases (1) $ 40,573 $ 56,709 $ 40,573 $ 56,709 (1) Amounts recognized from variable lease payments were $12,665 and $14,688 for the three months ended March 31, 2022 and 2021, respectively. |
Organization, Properties, Bas_4
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards (Details) | 3 Months Ended | |||||
Mar. 31, 2022 | Mar. 31, 2022entity | Mar. 31, 2022property | Mar. 31, 2022ft² | Dec. 31, 2021entity | Mar. 31, 2021ft²property | |
Organization | ||||||
Number of REITs in which the entity holds non-controlling common stock interest | entity | 2 | 2 | ||||
Number of Sponsored REITs | 2 | 2 | ||||
Number of promissory notes secured by mortgages on real estate owned by Sponsored REITs | 1 | |||||
Properties | ||||||
Number of properties | 24 | 33 | ||||
Rentable square feet | ft² | 6,915,609 | 9,548,810 | ||||
FSP Investments LLC | ||||||
Organization | ||||||
Ownership interest (as a percent) | 100.00% | |||||
FSP Property Management LLC | ||||||
Organization | ||||||
Ownership interest (as a percent) | 100.00% | |||||
FSP Holdings LLC | ||||||
Organization | ||||||
Ownership interest (as a percent) | 100.00% | |||||
FSP Protective TRS Corp. | ||||||
Organization | ||||||
Ownership interest (as a percent) | 100.00% |
Organization, Properties, Bas_5
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Cash, Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents | $ 7,683 | $ 2,613 | ||
Restricted cash | 3,300 | 1,500 | ||
Total cash, cash equivalents and restricted cash | $ 10,983 | $ 40,751 | $ 4,113 | $ 4,150 |
Organization, Properties, Bas_6
Organization, Properties, Basis of Presentation, Financial Instruments and Recent Accounting Standards - Variable Interest Entities (Details) - VIE, Not Primary Beneficiary - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Variable interest entity | ||
Maximum exposure to losses associated with VIE | $ 24.9 | $ 24.5 |
Prepaid expenses and other assets | ||
Variable interest entity | ||
Accrued interest and exit fee receivables | $ 0.9 | $ 0.5 |
Related Party Transactions an_3
Related Party Transactions and Investments in Non-Consolidated Entities - Investment in Sponsored REITs (Details) - entity | Mar. 31, 2022 | Dec. 31, 2021 |
Related Party Transactions and Investments in Non-Consolidated Entities | ||
Number of REITs in which the entity holds non-controlling common stock interest | 2 | 2 |
Related Party Transactions an_4
Related Party Transactions and Investments in Non-Consolidated Entities - Management fees and interest income from loans (Details) - USD ($) | 3 Months Ended | 15 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | Mar. 31, 2022 | |
Sponsored REITs | |||
Asset management fees, low end of range (as a percent) | 1.00% | ||
Asset management fees, high end of range (as a percent) | 5.00% | ||
Notice period for cancellation of applicable contracts | 30 days | ||
Type of revenue | Asset management fees | ||
Asset management fees | |||
Sponsored REITs | |||
Revenue | $ 9,000 | $ 16,000 | |
Sponsored REITs | |||
Sponsored REITs | |||
Impairment of Sponsored REIT | $ 0 | $ 0 |
Related Party Transactions an_5
Related Party Transactions and Investments in Non-Consolidated Entities - Sponsored REIT Loans outstanding (Details) - USD ($) | 3 Months Ended | ||||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | Oct. 29, 2021 | Oct. 28, 2021 | |
Sponsored REITs | |||||
Maximum amount of loan | $ 24,000,000 | ||||
Amount Drawn | 24,000,000 | $ 24,000,000 | $ 24,000,000 | $ 21,000,000 | |
Related party mortgage loan receivable | $ 24,000,000 | $ 24,000,000 | 24,000,000 | $ 21,000,000 | |
Sponsored REITs | |||||
Sponsored REITs | |||||
Term of sponsored REIT loan secured by mortgage, maximum | 2 years | ||||
Interest income and fees from the Sponsored REIT Loans | $ 451,000 | $ 394,000 | |||
FSP Monument Circle LLC | |||||
Sponsored REITs | |||||
Additional loan amount | $ 3,000,000 | ||||
Mortgage loan | Sponsored REITs | Fair Value, Inputs, Level 3 [Member] | |||||
Sponsored REITs | |||||
Amount Drawn | 24,300,000 | ||||
Related party mortgage loan receivable | 24,300,000 | ||||
Mortgage loan | FSP Monument Circle LLC | |||||
Sponsored REITs | |||||
Maximum amount of loan | 24,000,000 | ||||
Amount Drawn | $ 24,000,000 | ||||
Interest rate (as a percent) | 7.51% | ||||
Origination fee | $ 164,000 | ||||
Exit fee | 38,000 | ||||
Related party mortgage loan receivable | $ 24,000,000 |
Bank Note Payable, Term Note _2
Bank Note Payable, Term Note Payable and Senior Notes (Details) - USD ($) $ in Thousands | Oct. 25, 2021 | Sep. 29, 2021 | Jun. 04, 2021 | Dec. 24, 2020 | Mar. 31, 2022 | Feb. 10, 2022 | Jan. 10, 2022 | Dec. 31, 2021 | Dec. 23, 2020 | Aug. 02, 2018 | Oct. 18, 2017 |
Debt Instrument [Line Items] | |||||||||||
Unsecured term loan | $ 274,402 | $ 274,286 | |||||||||
Portion of future LIBOR-based rate risk | 200 | $ 5,200 | |||||||||
Borrowings outstanding | 40,000 | ||||||||||
Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 200,000 | ||||||||||
Fixed charge coverage ratio | 1.50 | ||||||||||
Series A Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 116,000 | ||||||||||
Interest rate (as a percent) | 4.49% | ||||||||||
Series B Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 84,000 | ||||||||||
Interest rate (as a percent) | 4.76% | ||||||||||
Maximum | Senior Notes | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unsecured leverage ratio | 60.00% | ||||||||||
Unsecured leverage ratio for significant acquisition | 65.00% | ||||||||||
Revolving Credit Facility [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate during period (as a percent) | 2.06% | ||||||||||
Weighted average variable interest rate (as a percent) | 2.04% | ||||||||||
Borrowing capacity | $ 237,500 | $ 217,500 | |||||||||
Increase to maximum borrowing capacity by exercising an accordion feature | $ 20,000 | ||||||||||
Borrowings outstanding | $ 40,000 | ||||||||||
Maximum allowable borrowing capacity upon exercising an accordion feature | $ 750,000 | ||||||||||
Facility fee at period end (as a percent) | 0.30% | ||||||||||
Percentage of funds from operations which dividend distributions cannot exceed per the BofA Credit Agreement | 95.00% | ||||||||||
Revolving Credit Facility [Member] | SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.11448% | ||||||||||
Unsecured leverage ratio | 1.65% | ||||||||||
Revolving Credit Facility [Member] | One Month SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.11448% | ||||||||||
Term of SOFR | 1 month | ||||||||||
Revolving Credit Facility [Member] | Three month SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.26161% | ||||||||||
Term of SOFR | 3 months | ||||||||||
Revolving Credit Facility [Member] | Six month SOFR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate (as a percent) | 0.42826% | ||||||||||
Term of SOFR | 6 months | ||||||||||
Revolving Credit Facility [Member] | Bank's base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Unsecured leverage ratio | 0.65% | ||||||||||
Unsecured Debt [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 400,000 | ||||||||||
Repayments of unsecured debt | $ 200,000 | $ 90,000 | |||||||||
Loss on extinguishment of debt | $ 700 | ||||||||||
Unsecured term loan | $ 110,000 | ||||||||||
Weighted average interest rate (as a percent) | 1.90% | ||||||||||
Effective interest rate (as a percent) | 2.20% | ||||||||||
Increase to maximum borrowing capacity by exercising an accordion feature | $ 500,000 | ||||||||||
Unsecured Debt [Member] | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate at period end (as a percent) | 1.75% | ||||||||||
Fixed rate (as a percent) | 1.12% | ||||||||||
Unsecured Debt [Member] | Bank's base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate at period end (as a percent) | 0.75% | ||||||||||
JPM Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 150,000 | ||||||||||
Repayments of unsecured debt | $ 100,000 | $ 50,000 | |||||||||
Loss on extinguishment of debt | 100 | ||||||||||
Unsecured term loan | $ 100,000 | ||||||||||
Portion of future LIBOR-based rate risk | $ 100,000 | ||||||||||
JPM Term Loan | Hedged portion | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Payment to terminate interest rate swap | 1,200 | ||||||||||
Portion of future LIBOR-based rate risk | $ 100,000 | ||||||||||
JPM Term Loan | LIBOR | Hedged portion | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fixed rate (as a percent) | 2.44% | ||||||||||
BMO Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 220,000 | ||||||||||
Effective interest rate (as a percent) | 4.04% | ||||||||||
Maximum allowable borrowing capacity upon exercising an accordion feature | $ 100,000 | ||||||||||
BMO Term Loan | LIBOR | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate at period end (as a percent) | 1.65% | ||||||||||
Fixed rate (as a percent) | 2.32% | ||||||||||
BMO Term Loan | LIBOR | Hedged portion | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Fixed rate (as a percent) | 2.39% | ||||||||||
BMO Term Loan | Bank's base rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Basis spread on variable rate at period end (as a percent) | 0.65% | ||||||||||
Tranche A Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 55,000 | ||||||||||
Loss on extinguishment of debt | 100 | ||||||||||
Payment to terminate interest rate swap | $ 600 | ||||||||||
Tranche B Term Loan | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of loan | $ 165,000 |
Financial Instruments_ Deriva_3
Financial Instruments: Derivatives and Hedging (Details) - USD ($) $ in Thousands | Jun. 04, 2021 | Mar. 31, 2022 | Dec. 31, 2021 |
Financial Instruments: Derivatives and Hedging | |||
Hedged amount of portion of the future LIBOR-based rate risk | $ 200 | $ 5,200 | |
Interest reclassified from accumulated other comprehensive income into interest expense | 1,900 | ||
Amount estimated to be reclassified into earnings within next 12 months | 100 | ||
JPM Term Loan | |||
Financial Instruments: Derivatives and Hedging | |||
Hedged amount of portion of the future LIBOR-based rate risk | 100,000 | ||
2019 JPM Interest Rate Swap | |||
Financial Instruments: Derivatives and Hedging | |||
Payment to terminate interest rate swap | $ 1,200 | ||
2019 BMO Interest Rate Swap | |||
Financial Instruments: Derivatives and Hedging | |||
Payment to terminate interest rate swap | 600 | ||
2019 BMO Interest Rate Swap | Cash flow hedges | |||
Financial Instruments: Derivatives and Hedging | |||
Notional Value | $ 165,000 | $ 165,000 | |
Strike Rate (as a percent) | 2.39% | ||
2019 BMO Interest Rate Swap | Cash flow hedges | Level 2 | |||
Financial Instruments: Derivatives and Hedging | |||
Fair Value | $ (195) | $ (5,239) |
Financial Instruments_ Deriva_4
Financial Instruments: Derivatives and Hedging - Interest Rate Swaps (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total amount of Interest Expense presented in the consolidated statements of operations | $ 5,366 | $ 8,600 |
Interest Rate Swap | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total amount of Interest Expense presented in the consolidated statements of operations | 5,366 | 8,600 |
Interest Rate Swap | Amounts of previously recorded gain/(loss) reclassified from OCI into Interest Expense | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total amount of Interest Expense presented in the consolidated statements of operations | (921) | (2,806) |
Interest Rate Swap | Amounts of gain (loss) recognized in OCI | ||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||
Total amount of Interest Expense presented in the consolidated statements of operations | $ 4,123 | $ 807 |
Net Income Per Share (Details)
Net Income Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Net Income Per Share | ||
Potential dilutive shares outstanding | 0 | 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | May 20, 2021USD ($) | Dec. 31, 2021USD ($)$ / sharesshares | Mar. 31, 2022USD ($)item$ / sharesshares | Mar. 31, 2021USD ($)$ / sharesshares | Dec. 31, 2021USD ($)shares |
Stockholders' Equity | |||||
Common Stock, Shares, Outstanding | shares | 103,998,520 | 103,151,781 | 103,998,520 | ||
Dividends declared and paid | |||||
Cash dividend declared per share (in dollars per share) | $ / shares | $ 0.32 | $ 0.09 | $ 0.09 | ||
Total Dividends | $ | $ 33,280,000 | $ 9,360,000 | $ 9,660,000 | ||
General and Administrative Expense [Member] | |||||
Equity-Based Compensation | |||||
Compensation cost | $ | $ 337,500 | ||||
2002 Stock Incentive Plan | |||||
Equity-Based Compensation | |||||
Maximum number of shares provided for grant under equity-based incentive compensation plan | shares | 2,000,000 | ||||
Number of vesting requirements | item | 0 | ||||
Number of shares available for grant under the plan, Beginning | shares | 1,780,820 | 1,847,384 | 1,847,384 | ||
Shares Granted | shares | (66,564) | ||||
Number of shares available for grant under the plan, Ending | shares | 1,780,820 | 1,780,820 | 1,780,820 | ||
Compensation Cost, Beginning | $ | $ 1,012,500 | $ 675,000 | $ 675,000 | ||
Compensation cost | $ | 337,500 | ||||
Compensation Cost, Ending | $ | $ 1,012,500 | $ 1,012,500 | $ 1,012,500 |
Stockholders' Equity - Repurcha
Stockholders' Equity - Repurchase of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jun. 23, 2021 | |
Stockholders' Equity | ||||
Shares authorized to be repurchased | $ 50,000 | |||
Average cost per share of repurchased shares (in dollars per share) | $ 5.72 | $ 5.37 | ||
Total number of shares repurchased, beginning (in shares) | 4,413,741 | 1,017,498 | ||
Shares repurchased (in shares) | 846,739 | 3,396,243 | 3,396,243 | |
Total number of shares repurchased, ending (in shares) | 5,260,480 | 4,413,741 | ||
Amount of stock repurchased, beginning | $ 37,019 | $ 18,775 | ||
Aggregate cost of shares repurchased | 4,843 | $ 18,200 | 18,244 | |
Amount of stock repurchased, ending | $ 41,862 | $ 37,019 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2017 | Dec. 31, 2021 | Dec. 31, 2019 | |
Federal Income Tax Reporting | |||||
Maximum ownership as a percentage of the voting power or value of the securities of each issuer other than REIT or "TRS" | 10.00% | ||||
Maximum ownership of securities in all TRS (as a percent) | 20.00% | 25.00% | |||
Maximum ownership of securities in all TRS when considered together with other non-real estate assets (as a percent) | 25.00% | ||||
Gross amount of NOL of TRS | $ 4,800,000 | $ 4,600,000 | |||
Net operating losses | |||||
Gross amount of NOLs available to company | $ 1,100,000 | $ 1,100,000 | |||
Income Tax Expense | |||||
Revised Texas Franchise Tax | 49,000 | 67,000 | |||
Tax expense | 49,000 | $ 67,000 | |||
Deferred income taxes | $ 0 |
Leases - Income Relating to Lea
Leases - Income Relating to Lease Payments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income relating to lease payments: | ||
Income from leases | $ 40,573 | $ 56,709 |
Undiscounted Cash Flows | ||
Variable lease payments | $ 12,665 | $ 14,688 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 01, 2022 | Dec. 31, 2021 | Mar. 31, 2022 | Mar. 31, 2021 | Feb. 10, 2022 | Jan. 10, 2022 |
Subsequent Events | ||||||
Cash dividend declared per share (in dollars per share) | $ 0.32 | $ 0.09 | $ 0.09 | |||
BofA Revolver | ||||||
Subsequent Events | ||||||
Borrowing capacity | $ 237.5 | $ 217.5 | ||||
Increase to maximum borrowing capacity by exercising an accordion feature | $ 20 | |||||
Cash distribution declared | Subsequent event | ||||||
Subsequent Events | ||||||
Cash dividend declared per share (in dollars per share) | $ 0.09 |